Btw I think owning a home that you pay off earlier than normal is a very smart thing to do. That's what we did. It offers a lot of security in retirement whilst giving you freedom early in your life to do other things. The problem is, most people can't even get on the property ladder. If they could, it would be great. But they can't. As such, renting is a good alternative. It is not a forever alternative, but in the current climate with pretty high rates and rising, it would work for some people and not everyone. Then, over time, one needs to assess their needs and consider their options when it comes to buying a house, including buying a house outside the UK where they're not taking on as much debt. But buying a house is not the only path (as great as it is for some), renting (on balance) will be better for some people long term depending on their circumstances. Keep the comments coming :)
I could pay off mine early but that would limit the money I would have to invest and make more money, so it depends if you can put the money to better use elsewhere.
The reason the UK is obsessed with home ownership is because of the lack of security with renting. A lot more people would be happy to rent, for years, if the rental market offered more security. The market has been left unregulated, totally out of control, with many speculating and profitting hugely from buy-to-let. Leaving tenants with unsecure homes they can be evicted from pretty much any time - and no the new laws won’t solve this as there are always loopholes and get out clauses for landlords - Homes that don’t feel like homes (no children/pets/decorating policies). And out of control rents. In many European countries, tenancies are offered for 3 or 4 years, rents and increases are regulated, and tenants can have a pet and decorate as they please, making it their real home. Some people rent for life and see no problem with it.
Hi Ken. I'm at a point where I am considering moving home. It's a slightly different proposition than for a first-time buyer, but everything you say definitely applies to me. I have 20 payments left on my current mortgage with my overpayment plan, but I do not like the area I live in. Despite this, I think I will probably sit tight for 18 months and increase my overpayments, so I'm mortgage free slightly early and see what's going on with mortgage rates at that time. As always, thanks for all your insights 😊
Move and increase your quality of life, that being said you need to be sure that your new area will give that to you and that you can afford to have a mortgage , with your lifestyle. Go for it
I consider taking a mortgage as simply replacing your private landlord with the bank. Only difference is you get the option of owning parts of the house over time depending on your choice of deposit and monthly payments. As long as you stick to taking a mortgage on a house, no more than what you would have been able to afford on the private rental market. You have not bought the house until it is mortgage free, until then it belongs to you and the bank.
Ken, you listed the disadvantages but what about the advantages of buying a home? Considering today's rental market, I wouldn't want a landlord deciding my fate whether or not I should pack up and move (most likely further away from the workplace) by exorbitantly increasing the rent. Also, in my opinion, mortgages are still good value and still cheaper than renting. I've been a homeowner for more than 20 years, the washing/dishwashing machine do not break every year... So please list the advantages of owning a home. Keep up the good work. God's blessings to you and your family. Waiting for an update.
Perhaps I should make a second video based on your message. Our channel has a lot of content helping people to buy a house. But, maybe another video further spelling out the advantages will help. Thanks for your comment.
Absolutely amazing! In 1 second at 12:30 you nailed the entire rental market on the head. Your phrase "Don't buy a house if you are trying to get rich" is a perfect summary. This shouldn't just be a bonus point, but I would love to see a whole video on it. Many people don't release that investors (I appreciate this video is about personal property) that buy property do it via an SPV using profits from other businesses through inter-company loans. Why is this important? Because successful business owners know that property is a great way of PRESERVING wealth, not generating wealth.
This is best and honest view on this subject I have ever heard! Thank you. We have own three homes over years and looking back it was a financial trap and nightmare. I never paid off my mortgages because I was constantly moving because of company relocating me. So don't buy if you don't need to.
As a 30 year old Londoner, being in the UK is so demoralising. Any sort of ownership or ability to survive comfortably feels hopeless unless you earn close to 6 figures or have a wealthy family. It's why my family are considering moving abroad. The government is on the side of the rich and not supporting the generations that will need to continue on after them. (Brexit, not taxing the highest earning companies and individuals adequately, lack of affordable housing, lack of fair pay and support for public services etc.) With the terrible weather and worsening economy (and morals) it's harder to justify staying here. I was set on buying a house a couple of years ago, but as the situation gets worse in the UK it feels like a 25-30 year shackle as opposed to an opportunity.
My heart sank reading your message. I feel you TOTALLY! There are sooo many people in their 20s and 30s that feel exactly how you feel. Moving out of the UK isn't a bad idea but you need to be moving into better circumstances. Alternatively, leaving London (if you really want to own a house) is what to do. It's sad but it's the reality of this country and that city. As you say, only those who have the means can afford to live there. Mary grew up 27 years in Hackney and couldn’t even own a house there. When we go down there now, it is totally gentrified by people who have Generational Wealth passed down. Even where we lived in the Greenwich Borough became unaffordable. We had to leave and move to Kent. It paid off! However, even that's becoming mad expensive and pricing people out. This is partly why I made this video because for a lot of people, renting is their only option and that's OK. However, both owning and renting have pros and cons. If we were starting all over again, we'd consider strongly moving outside the UK and run an online business that earns in dollars to help us to buy a home outright and support our lifestyle. Alternatively, do what we've done but find somewhere even cheaper so that we're not heavily indebted.
@@TheHumblePenny Thank you for the advice. It can be hard to change your mindset when you've been raised to aim for certain goals, but as we've realised the goal post and reality of life keeps changing so we have to adapt. The same reason our parents/grandparents came here is why we have to leave. Unfortunately other countries pay more with my husband and my careers. But it's hard when you don't know people who live there to get a true gauge of quality of life. Luckily the internet. Which is how I found you✊. Keep doing what you're doing 🙏 and thanks again.
Love this very real conversation. As a renter who has no family to depend on, and aspiring to own one day it’s easy to be envious or feel like you’re behind everyone who has the help to buy. Just very sobering, owning a home is no easy ride!
Whilst i completely agree with you, if I hadnt jumped into home ownership 8 years ago i wouldnt be in my much better house now with less than 40% left on my mortgage. And having a young family, it feels essential to be able to shelter them in your own house. I cannot wait to be mortgage free!
Keep going! You're doing a good things and I understand where you are. It is a good move for sure and I did the same as you. What makes what you're doing worth it is that you're working towards becoming mortgage free. This is a worthy destination :)
Agree with you i feel anyway you can ladder up the property is better, even with help to buy or sharehold, this way you will be paying monthly for your mortgage rather someone else mortgage through rentals.
Thanks for this video. I am a FTB and was surprised with your comment to wait until you have a significant other to help. I personally feel, if you cannot buy on your own, you sure will be in trouble when the relationship falls apart. As a person aged 40, seen it a lot in my friendship groups.
Couldn’t agree more. It’s always easier for those in “stable” relationships to say this but through personal and professional experience I have seen so many of these arrangements go wrong. Even when it involves family members. Besides, romantic relationship sustainability just isn’t as it used to be. Such comments need to be considered alongside the high divorce rates and property claims going through the courts. Joint purchases aren’t even an option for most ppl. And were they are they may not be the wisest!
What I'm saying is, it's easier if there was someone else (including someone you can share costs with that isn't a partner). If you're single and can afford to, please go ahead.
Thanks for this enriching content. Personally with today's prevailing situation, people should actually think it all over again if it's worth doing. They shouldn't just go into it right away just because everyone says it's the way to go.
The problem with this idea is that, the rate at which house prices are rising, you risk missing the boat for good. & if you don’t own within the next 5 - 10 years you may never get on the ladder. Essentially a London situation spreads all over the country over time due to the countries lack of ability to deal with rising inflation. So if a house in 5 years on average is worth 500K the average person will not have 50K deposit let alone the affordability to pay the monthly payments due to selfish corporations not rising employment wages to keep up with house price inflation. So when you choose rent, just know your risking missing the boat & it will get to a point where the only new people buying houses will be those who have gotten wealthy or come into some large money some how, the divide will be big, life will get worse as you know it because the maths doesn’t lie.
With all the factors mentioned in the video, I think anyone who falls within any of those categories is better off in the interim to miss that proverbial boat! It makes no sense to buy when one would eventually loose it anyway which might also come with its own downfalls such as negative equity etc. it’s a long term commitment that must be well taught through before committing to having considered all the points that have been highlighted in this video. As usual, really great and timely content! 👏
Great video; so important to remind people not to buy a house just because it's the 'done thing'. Personally I'm keen to become a homeowner soon because, first and foremost, I can afford it for the first time in my adult life! I'm married, settled in my career and location and I'm ready to have full agency and privacy in my home for the first time in my life. We lived in a house whose wall and roof cavities were infested with rodents for 3 years because it took the landlords nearly a year to believe us, another year to get a professional pest controller out (they put poison down and we lived with the smell of decomp) and it was only when we moved out they admitted there was a broken sewer pipe allowing rodents to climb up and into the wall and roof cavities. Even when you have perfect landlords, you're living in an asset they own, which they may need or want to sell at any time. They have right of access to your house for inspections etc. I'll probably feel differently when I'm emptying my bank account to replace my first boiler, but I'm nearly 40 and I'm soooo ready to live in a home where we decide who has keys to our doors, and it's nobody else's business what's hung on our walls and how often the lawn gets mowed 😅
Wow, what a comment. Love it! Gotta say, by the sounds of what you've been through and where you are in your life, it makes sense to buy a house. Keep going and we look forward to an update 😀
I understand what you're saying but it's more complicated than this. Unfortunately, in the UK, you never really have full autonomy over your home. If you're a renter, you answer to a landlord. If you're a leasehold owner, you answer to your freeholder. If you're a freeholder, you answer to the council & your neighbors in the form of planning permissions and neighborhood disputes.
Rent is just as expensive on a monthly basis if not more. The money also disappears into thin air, while the mortgage is essentially going back into your own pocket(minus interest). You will also get your deposit and equity back when you eventually sell but get back nothing when leaving a rented property. I however think renting gives flexibility financially as it enable people to be liquid and make investments that will give faster returns than a mortgage, so depends on the person.
Very insightful video thanks for the phenomenal content Ken! As a 27yr old I always believed home ownership was a primary driver of wealth creation in the UK. However, given the current economic climate there must be another way.
You make some great points for the current climate, but for me despite all the responsibility and costs that it involves i am a committed home owner and would never replace home ownership with renting as i feel in control of my own destiny, especially when I made my last mortgage payment six years ago. 🙏🏾🙏🏾
Really helpful video! I used to feel like I was behind for not being ready to buy a house but more and more I’m seeing I’ve made an active choice that it’s not for me or as attractive a choice as it once was.
I definitely regret taking on a big mortgage, although we love where we live and the benefits of proximity to good schools cannot be quanitified. If we didnt buy when we did, we would not be able to now. I think that's a huge concern for people. I think also if the rental market was more favourable to tenants (e.g. longer term lets) then renting would be a more viable option. We were renting but would come home to find a notice to terminate the agreement and suddenly your life is upside down. Flexibility is a two way street. Also worth considering you can always rent a room out tax free when you buy a home. Very tricky debate and there never seems to be a good time to buy.
Very tricky debate for sure. You can tell by the number of comments on this video so far as so many people have a view on this topic. Thank you for sharing though. We always like to read about lived experiences. As you rightly point out, the rental market could be more favourable.
My partner's son bought a house with his partner which is about 40% of their income plus they have a son and she works two days a week. The only reason why they survive looking after the house is because my husband trapes 20 miles every five minutes to help them fix things. It's such a risk I think, all to have the big house which is just filled with things that you won't even use.
Love the point on ‘uncontrollable service charges’ for flats; its often at least equivalent to or more than the cost of monthly council tax bills - it’s definitely one for people to be aware of when purchasing flats
When I got my property 5 years ago what I looked at was how much my rent was likely to go up each year. (It was housing association contract increase 2% per year). I calculated that into retirement to see what pension I would need to cover it. I am fortunate to live in an affordable area of the country. I am also in rare position that having locked in new fix (10 years) couple of months back my mortgage payments are actually due to go down!
Everything you said about owning a house can be said about rental. If you are renting and there is a problem you can call your landlord but will they fix it? If your renting and decide to travel the world great, but if you had a mortgage you could sell the house to fund your travels or rent it out. The bottom line is this, when you rent you rent forever, but when you take out a mortgage eventually the property is yours and you can then keep that money in your pocket. Yes I know that some homes do get repossessed but for most people they manage to pay their mortgage and then leave the house to their next of kin when they die.
Thanks for watching 😀. Good points. This is just the other side of a conversation that is not often had. Buying a house is a good idea under certain conditions not always. Question for you - How many people do you know actually own their house outright or passed it down to their children?
I know quite a few people who own their houses outright and a few who had their houses left to them in a will. I'm in my late 50s and my parents generation encouraged us to buy rather than rent, I'm glad that they did.
@@valritajones4044 Good to hear :). We hope more people who can afford to buy do and don't just do so blindly on autopilot because things are very different right now.
I am intrigued why someone who bought there own house is putting others off. I bought my house 15 years ago, it is no rocket science, yes a deposit was required . Maintenance is not sky high. I pay for home emergency cover with my house insurance but in the end much cheaper than renting. If renting is so great, go and sell your house and live the rent-life
Great video! I generally agree with your points, in that you shouldn’t buy a house if: (1) you can’t afford a reasonable deposit (I would aim for at least 20%); (2) you aren’t settled in terms of location (ie you want flexibility) (3) your tendency would be to view the house as an investment (it is a home, which is an asset but not an investment) There’s no problem with renting but you should note that high interest rates will eventually feed into rental prices, meaning it will often remain more expensive to rent than to buy. Yes if your boiler breaks in a rented property you can call the landlord but remember s/he will fix the boiler from your rent so be prepared to see rent increases. More importantly though as you move into retirement and your income drops home ownership will protect you from future housing price increases if you manage to pay off your mortgage. Even if you’ve invested wisely you can still be dangerously exposed to increases in rent in your old age.
@@TheHumblePenny FWIW I think you’re right in that I wouldn’t advise anyone looking to buy to do so now even if they have a suitable deposit. High interest will mean they pay way too much over the term. Give it 5 years, invest the money and rent for a while to see if rates drop.
I completely agree. I’ve never owned a home and nearing 40. Never had a great income. Hubby and I have always had variable health, so taking a risk with home ownership was something we shied away from. Not to mention that we have not been able to save a deposit for the property we would like. Now, in the current climate, our income is a little better, though health no more certain, we started considering shared ownership, but cannot get anything comparable to our rental property in size and location that’s affordable (taking all the additional costs you mentioned). And even though we are in social housing, as it is a newer property, we don’t have the right to buy. It’s a shame, but I guess we are destined for a rental life. Just grateful for a secure roof over our heads to be honest.
Instead of getting a mortgage, I kept buying divi ETFs. In the near future, the dividends will be paying 80% of my rent. Ive never liked the idea of being in tons of debt and having to work constantly to pay it off. The price of some of these yards dont match the value.
Brilliant information once again Ken. With the little that I have saved and have got plans to escalate my saving now that my oldest is 23 and my youngest is 17, I believed that all is possible with God and I can and will still own my own home without a rush but with God's help to satisfy me early and that I will live to enjoy that which He has and will bless me with. Not everyone on earth will achieve their heart's desire but God will not allow you to be in need - where owning your own home is not possible, renting, social housing, etc will be.
Very rich channel. I have learnt a lot here. Thanks. The points are well noted but they are not sufficient to compete with the advantages with owning a home versus renting except you have a free place to live. 1. Your home is so important that you don't want any uncertainty or things you can't control around it. E.g. Landlord/landlady increasing the rent as he likes, delay in repairs, very long time in getting accepted as a tenant for a new house etc. You don't want to subject your cherished family to all those things. 2. The rent you pay is totally consumed. The mortgage you pay go straight into building your equity in that property month-by-month. It may be small now but one day you will wake up and find out that you have more than 50% equity in a 400K home. The balance, own a moderate home that meets your need and not your wants. An extravagant or expensive home is not an investment as such.
Great advice and great honest explanation from someone who is a homeowner.😊 I think some commenters might have missed the actual message though. If you can afford to buy then great! Go for it! No new news there! 😄HOWEVER! Given the current climate Ken is saying weigh up the pros and cons as to whether homeownership is really for you and not just a tick box exercise. Its a serious commitment and like some others have mentioned the UK culture has always swayed towards home-ownership but in todays climate and for many that might not be a viable option for some. Saving up for a larger deposit and/or renting is not a bad thing.
Although I agree with most of the things you said, I still think it always depends on personal circumstances. I know someone who bought a new built flat in Birmingham City Centre with 60% discount (government scheme). The person made 20% deposit, and is now paying less than half of what she could have paid if she was renting. Plus, the possibility of converting that in to renting in the future looks like a good investment. This including the sercive charge. Thank you for this video.
Right on ! you never truly own a place until you have repaid it. A home is a lifestyle choice not an investment. If people can afford to buy it outright or paying half of the property but otherwise on a standard income it's a trap as people don't take taxes and unforseen expenses in consideration. It's a liability
I agree with your points, however it makes me a bit sad because I've been renting ever since I moved to England, I'm now approaching my 30s and me and my long term boyfriend are thinking about having kids in the future (4 years time or so). I've grown tired of renting, of moving almost yearly, of every house I live in not feeling like a home. Renting while having kids sounds awful to me. I know that the house we're currently living in doesn't even allow children. Currently we have around 40k saved and we're aiming to *attempt* to buy a house with as big as deposit as we can, shooting for 40% deposit. But all the news, cost of living, house prices, all of that is very demoralizing and, honestly, I don't know what to do. All I know is that, yes renting gives you flexibility, but it's also a pain in the butt and you constantly feel like you don't belong anywhere.
Daniela, I feel your pain. Well done for saving 40k! If you're both settling down and plan to have children, owning your own home is a very good idea. Especially given how you feel about renting. But you need a solid game plan for where you want to buy (being realistic) and a plan for how you'll get rid of that mortgage eventually. Buying a house was a very good idea for us given our set-up with kids and the desire for stability, etc. If those are priorities for you, then definitely keep going. You'll cross that line one day :)
If you have 40k, why not deposit 30k as 10% on a 300k home and replace your private landlord with the bank? It might mean buying in a different location or a smaller home first but if done right, allows you to save or not pay off the landlords mortgage.
I am not a financial advisor. A stable roof over your head is priceless!. Why do you need 40% deposit? Buy a home with whatever deposit the lender accepts to grant you a mortgage (£40K for £400K property is doable). You can always make over-payment every month/how frequent as you wish upto 10% of your original borrowing amount per year without penalty. Over-payments will reduce your mortgage terms which means you can be mortgage free earlier. One day, you will thank me for this idea.
house prices may be going down now or rate of increase slowing down, but if you need a place to live for now and will stay in it for the next 10yrs, then you shouldn't bother about that. You should find something within your budget and make your mortgage cheaper than private rental market. House prices will go up and down but so will rent!
This Content is gold dust!! The home ownership obsession is a British-American thing, in some European countries renting is commonly acceptable, resources can then be invested in a portfolio to create wealth. Mortgage (car finance) is one of the main blocker of wealth creation plunging most middle earners into financial trouble during economic volatility such as the current high inflation / interest rate.
That’s because on the continent the rental market is regulated in many countries and tenants are much better protected. Families can stay put for years in a good rental at a reasonable cost. No such security in the UK where the threat of eviction/sale/rent increase is constant.
'FOMO driven desperation' it really does sound like a trap to some extent especially if you can't afford it yet. thanks for the insightful video as always
Very good points made. I was inspired to acquire a buy to let watching your videos.on the other hand, my principal place of residence provides long term stability, peace of mind and an option to take advantage of rent a room scheme.
Or the other option is stay home living with your parents until your financially ready. There are situations now where rent has become expensive and takes up a significant % of monthly take home pay. Your video has certainly been playing into my thinking lately of whether to go for a house or flat 🤣
You know what, this is what Mary did. She lived at home till she was 27 and saved loads. This is definitely an option for those who have family who can allow them to live there, etc.
Hoping rates will continue to rise to at least 10%, then there will be a much needed correction in the market. Then people like me can buy a house at a reasonable price.
I live in Bristol, and it's just been published that it's the most expensive city to live in after London. I have lived in my flat for 17 years, single parent, don't want a partner to live with. Best decision I made to buy my property. If I was renting it would be 3 times more expensive.
Morning, this makes absolute sense. Would really appreciate it if you could make a video on the pros and cons of downsizing when reaching retirement age given the current economic and housing climate. I live in the South of Greater Manchester
9:50 Just want to highlight that while rents are skyrocketing, we all know interest rates are too. Just like how your barber saw his rent rise from £1k to £1.8k, there are homeowners who are seeing their mortgages rise similarly and none of that £800 increase will go towards building their wealth, just like the renter. As you mentioned, unlike your barber, these homeowners do not have the option of simply packing their bags and finding a better deal elsewhere.
Hi Ken I think most people buy houses out of the Jones pressure. However if you have an opportunity to buy a council house on a Right to Buy basis I'd say jump on it and take advantage of the discount.
Love this channel! And this is really good for those who haven’t purchased yet. Just got a fixed rate for 3 years and that’s when my HTB ends and I’m not sure if I will sell or continue on. I won’t lie I do get nervous about what the interest rates will be like in 3 years!
Hi Ken, great vid. I prefer to own property than rent but I truly think it comes down timing. My wife and I are paying a mortgage and trying to become rich, though this is something we started in 2015. We have stocks and shares which we plan to build for 10 years. At which stage we'll equally pull stocks to pay off the remaining mortgage and be mortgage free to invest bigger. Whether we'll go into property or ontinue investing fully into dividends at that stage, we're unsure, but I definitely agree it's about timing the market. We're remortgaging August, but luckily only paying £200 more a month due to what's left.
Really good points! very challenging.. It's hard not to follow what everyone around you is doing. Does it make sense then to rent and invest the extra money towards paying cash on a future home? for example when we retire, having the option to buy a house with cash and being rent/mortgage free. Home buying is such an emotional decision but its reallt good to bring these points to bring us back down to earth!
This is such an emotional topic. I think some people literally feel attacked when you tell them there are scenarios when buying a house won't make sense for them. So deep is the programming we all have about buying a house as the ultimate destination. One thing I've learned is that one way of doing things doesn't suit everyone. Some will always be better off buying a house and some better off renting. It will depend on each person and their circumstances. However, renting and then investing one's money and buying in the future should not be frowned upon. Obviously if one can buy early, they should, however, the alternative path is also a credible one for some people. We bought because we could afford it and we wanted the absolute security of a home and because we were settling down to have children. For another person under other circumstances, renting could make more sense.
So rent for the rest of your life and when the owner wants their home back I have find another rented home to move into which most likely will be more expensive than the previous rental property . And in the end I own nothing substantial in life, nothing to give my children. On edge because I may have to move any time , uncertainty. Right . Life feels shxt , what is the point of anything .
The bonus one is the nail on the head because why would you tie yourself down like that? I think even buying a flat solo kinda sucks, plus who will inherit it after you pay it all back?
The majority of my wealth has came from home ownership. I always improved properties that were cheap and needed some work. I made more profit than my salary 2 years in a row and then made another lump sum 2 year later. I'm not onto my fourth home and will soon be downsizing into a home to be mortgage free. There's too many positives to home ownership not to buy if you can. Private residence relief, having payments go toward equity rather than rent, homes go up in value over the long term and last but not least, a man's home is his castle. When you own your own home you can do what you like with it and it gives you a better sense of pride and well-being. I'm not a fan of videos where people don't practice what they preach. If its not a great idea then sell your home and rent. Otherwise it's just hypothetical and seems a bit like click bait.
Are you trying to say that as a homeowner, I cannot explain why in the current climate, it might not make sense to buy a house? And why renting is a credible option whilst one assesses their situation with the potential to still buy one day if it suits their circumstances? By the way, good for you re creating wealth from homeownership. If you watch the video well, I make it clear that one should buy a house if they can. However, buying a house at all times and at all costs is not the only solution.
I’m not sure about paying of a property early in every circumstance. I would rather remortgage take out the equity and reinvest it in another property. You lose the opportunity to do this why you pay of the mortgage.
House is a tangible asset unlike stocks or so, which are purely numbers pushing game. If you like to move around for work, no problem just rent out current property and pay the mortgage from the rental income you generate from the property, and rent wherever you want for the amount you would pay for mortgage payments. You can move around for years and still eventually own a house, where you don't have to pay rent. I feel anyway you can ladder up owning a property is a good thing, and if you're good with finances than you can finish the loan 40% of the term if you can mange to pay double the mortgage payment monthly.
Among all the points mentioned, having bad neighbours can be the worst, especially if you have a 20-30 mortgage! If you're renting, just give notice and go!
Ken, why are you shouting?!🤣 But you're right... buying a home is a massive financial burden people shouldnt take lightly but either way one should aim.
Nice analysis of the situation but at a glance which is easier? Owning a home and building equity or paying into another person’s equity by renting? If you buy clothes, you will definitely need a washing machine and detergent to wash your clothes regularly. In my view, it boils down to affordability.
The rent is more than £1000... Yes, but without all the other burden. If you can buy in London, great. We couldn't afford to so we left. I suspect that would be most people.
Interesting. However if you’ve found a great deal on a property, go for it. If the math is mathing based on your circumstances, go for it. Don’t overstretch, that’s the main thing.
Standard home here £400,000 Rent for same property £1800. Pm over 25 yr = £480,000 if no increase , so no renting is not money saving in the slightest Also if plans to travel , put deposit on a house, rent it out while travelling, obvious income .. worked well for me and ver least stability, buying a house as young as poss is the best thing for most if you want your money to work for you and your future
If you don't have children or value a stable secure home then renting is a perfectly viable and often financially more advantageous option in the short term otherwise home ownership is always better especially over the long term.
I bought a 2 bed flat near Edinburgh for 185k last year, 3.6% interest rate but it was a new build so is only being finished just now. Not sure if I did well or made a mistake but just gotta roll with it now.
Great video 👌🏽 I sold my flat in February due to some of the points mentioned and just want the flexibility to travel & invest while the economy is in the 🗑️ I'm not sure if I'll ever buy again for my home.
I paid £39k for my home in 1995 and paid it off within 5 years. I then continued investing the same money I would have to pay on a mortgage into a ISA. it's Currently over 300K. Had I decided to increase my house this 300K would be in the banks pocket.
Completely agree, always have the option to rent and invest, this way that big deposit is working in the market and not just sat in a home which may or may not increase in value. If you can’t comfortably afford it you should probably carry on saving until you can.
If you own a house and decide to move or don’t like your area. Just rent it out, these days housing agencies do everything for you. All you need to to is pay a small fee. Owning is the way forward. Renters just pay other people’s mortgages.
Take in a Lodger and they help pay the bills, problem solved. The demand for accommodation these days is huge even in the suburbs of most main Cities. Professionals and Students are always looking for accommodation. Living with a girlfriend/partner is not always a wise decision. Swings and roundabouts - Buying a house worked out OK for me. So good that I bought 2 more as investment properties. Right now buying a house in the current housing market is maybe not the smartest idea or thing to do but it won't always be like this. Yes, you need insurances and to fix the washing machine, cut your grass but you can also install artificial grass which means you have little garden maintenance to do. I don't unfortunately yet have a location independent occupation or business but watch this space. 😊
I own a flat and the service charges are a problem. However, my flat is mortgage free and is worth quite a bit so for now the service charges are not a problem.
Thanks for this Ken. We are planning on buying as we have a decent deposit but we are unsure if time is right with recent interest rate rises. Last night i thought maybe we shud move abroad cos that money cannget olus a house outright in the right country. Will see what happens..will hold off n put the money in an investment until next year
Absolutely brilliant video, I love it. You hit all the points especially 25% of your income should be the max prejection for your mortgage. However due to the fact I am in the real estate industry I need to sell all my listed apartments. My love for you right now is 50/50. But overall. You are a legend.
I am one of those people who is paying off a mortgage in retirement. It was a deliberate decision in times of cheap money. I will now pay it off quickly as today’s mortgage costs make a better investment than putting money in a bank savings account. I am not crying as my investment returns including pensions were the best decision.
Rental flexibility is great but the market is so broken. I just wish they'd abolish stamp duty on your main residence at least as it's a tax on mobility and stops homeowners from moving to pursue opportunities - just as you've highlighted. Still trying to suss out my plan for the house I own outright.
I think you are spot on. Here is my take on it. For poor people trying to raise to middle class owning a home is the goal. I think people often see it as if you own. You're 'better' than others. Owning a home hasn't been my main agenda in life. I simply cannot afford to atm. So I have rented all my life. I am at a point where I want a home I can call my own, but I don't have enough for a deposit for London. I have always been interested in owning a home as a source of income. That's something I want for myself. An asset I can make consistent money from and property seems like a great way to do that. I do think there is pressure to buy a home. But no one talks about the peiwpl who bought a home but can't keep up the mortgages, peope who buy a home but there always something wrong they have to fix and fork out money for. Owning a home just like rent goes up interest rates on a mortgage can shoot up too. I sometimes wonder if owning a home is a low-key scam to keep people paying your hard earned money to banks for 50yrs.
Paying a landlord and resigning yourself to rent is renting for life. You can never take equity out of a property to invest in something later in life if you rent
Rents are insane, I find it difficult to see how buying a home is more expensive. Don’t forget rents are way too expensive, and those monies you pay towards rent are money gone in the bin. You could have invested that into your own home that you recover when or if you sell. Remember you will always pay bills irrespective of renter or home owner. Issue is saving towards deposit, if you can go for a home you can afford the mortgage it is way better than renting. Stamp duty is wavered on purchases under 400k and there are 95% LTV if saving for that deposit is an issue. Yes mortgade rates are quite high but rents are also too high now. Don’t enrich landlords! If you can afford your own home. I do love some of your videos and completely disagree with you here.
I think buying a house will work for some people at certain times. However, what I'm saying is that it is not the only option. Renting is a good option for some people. As with all things, both of them have pros and cons. If you can buy a house, sure, go ahead. BUT, you also have to be prepared to be a homeowner and balance the rewards with the risks. That's what I'm saying.
Definitely worth owning and paying off house asap or before retiring but as you say not if you’re young and single. I always follow that 25% rule for monthly payments as well. I’ve got a small mortgage left on a 2 yr tracker where I can overpay 25% without penalty instead of 10% on a fixed rate with my current lender. At the end of the 2 yr term as soon as it hits the SVR ill make my final payment to be mortgage free.
Government has failed to have a house building policy , decades of neglect , I would also comment the mortgage sector is not stable and very shortsighted which is idiotic when majority house sakes are long term commitments . I have always thought their should be different interest rates for different sectors . People power in setting up good old fashioned building societies is another way forward , commercial banks have failed ( 2008 tax payer bailed them out )
This does make a lot of sense about different options to owning a property. One question i would like to ask? What about people who have a low credit score or had bad credit in the past. Can they still get on the property ladder and if so what options would be available to them?
Exactly. And it's important to tell both sides of the story. Owning a house is great but has disadvantages. So does renting. Overall, if one can buy and afford a home without strain, and look to pay if off sooner rather than in 25 or 35 years, it will work in their favour. However, renting is a good alternative for people who either can't afford to buy or simply choose not to in this climate and then reassess things as time passes.
It's rather an advantage if u struggle to pay for ur mortgage since it will save you rent money (as in rent is rather on mortgage ) and in trying times ,you can get your equity and re-mortgage ( i.e get the money paid so far as mortgage and still have a house to you name .
i might never buy! might never have the chance to, but still. the costs can be horrendous. i'd rather let landlords take the risk, and make my own investments in other assets. plus i've had too many experiences with nightmare neighbours. the thought that i could be stuck next to that person until further notice... not good!
I would rather pay £1000 mortgage than £1000 rent. Plus the future value of money is less in the future so that massive mortgage becomes not so massive in 10 years time and inflation actually works in your favour as long as interest rates aren’t too high🎉
Upgrade your home insurance mate! Mine covers all those unforeseen circumstances. Washing machine, boiler, push bikes in the garage, kids breaking the television after throwing their toy into it. Full proof mate.
I disagree with the vast majority you wither buy your house and it is a long term investment. Or you rent and pay someone else's long term investment. Why did you buy you house?
Lol, I think it should be “why you should not buy an expensive house” just buy cheap then rent it out or sell. I think the main problem is that houses have become so many peoples main financial investment.
Btw I think owning a home that you pay off earlier than normal is a very smart thing to do. That's what we did. It offers a lot of security in retirement whilst giving you freedom early in your life to do other things. The problem is, most people can't even get on the property ladder. If they could, it would be great. But they can't. As such, renting is a good alternative. It is not a forever alternative, but in the current climate with pretty high rates and rising, it would work for some people and not everyone. Then, over time, one needs to assess their needs and consider their options when it comes to buying a house, including buying a house outside the UK where they're not taking on as much debt. But buying a house is not the only path (as great as it is for some), renting (on balance) will be better for some people long term depending on their circumstances.
Keep the comments coming :)
I could pay off mine early but that would limit the money I would have to invest and make more money, so it depends if you can put the money to better use elsewhere.
The reason the UK is obsessed with home ownership is because of the lack of security with renting.
A lot more people would be happy to rent, for years, if the rental market offered more security.
The market has been left unregulated, totally out of control, with many speculating and profitting hugely from buy-to-let.
Leaving tenants with unsecure homes they can be evicted from pretty much any time - and no the new laws won’t solve this as there are always loopholes and get out clauses for landlords - Homes that don’t feel like homes (no children/pets/decorating policies). And out of control rents.
In many European countries, tenancies are offered for 3 or 4 years, rents and increases are regulated, and tenants can have a pet and decorate as they please, making it their real home. Some people rent for life and see no problem with it.
Or due to a rubbish pension not covering rent and food.
You make good points.
Ken, what I like about you is that you absolutely keep it real! Home ownership isn't easy.
I appreciate that
Hi Ken. I'm at a point where I am considering moving home. It's a slightly different proposition than for a first-time buyer, but everything you say definitely applies to me. I have 20 payments left on my current mortgage with my overpayment plan, but I do not like the area I live in. Despite this, I think I will probably sit tight for 18 months and increase my overpayments, so I'm mortgage free slightly early and see what's going on with mortgage rates at that time. As always, thanks for all your insights 😊
You're in a phenomenal place with making those overpayments. I think if one can buy and pay off the house early, it is worth buying.
Move and increase your quality of life, that being said you need to be sure that your new area will give that to you and that you can afford to have a mortgage , with your lifestyle. Go for it
Watching from Canada, am an international student and i just started working full time, am learning a lot from your channel...great video
Nice! Hey 👋🏾
I consider taking a mortgage as simply replacing your private landlord with the bank.
Only difference is you get the option of owning parts of the house over time depending on your choice of deposit and monthly payments. As long as you stick to taking a mortgage on a house, no more than what you would have been able to afford on the private rental market. You have not bought the house until it is mortgage free, until then it belongs to you and the bank.
This is true and works if you can afford to get a mortgage and buy a house.
Ken, you listed the disadvantages but what about the advantages of buying a home? Considering today's rental market, I wouldn't want a landlord deciding my fate whether or not I should pack up and move (most likely further away from the workplace) by exorbitantly increasing the rent. Also, in my opinion, mortgages are still good value and still cheaper than renting. I've been a homeowner for more than 20 years, the washing/dishwashing machine do not break every year... So please list the advantages of owning a home.
Keep up the good work. God's blessings to you and your family. Waiting for an update.
Perhaps I should make a second video based on your message. Our channel has a lot of content helping people to buy a house. But, maybe another video further spelling out the advantages will help. Thanks for your comment.
Absolutely amazing! In 1 second at 12:30 you nailed the entire rental market on the head.
Your phrase "Don't buy a house if you are trying to get rich" is a perfect summary. This shouldn't just be a bonus point, but I would love to see a whole video on it.
Many people don't release that investors (I appreciate this video is about personal property) that buy property do it via an SPV using profits from other businesses through inter-company loans.
Why is this important?
Because successful business owners know that property is a great way of PRESERVING wealth, not generating wealth.
💯! I will need to make that video!
This is best and honest view on this subject I have ever heard! Thank you.
We have own three homes over years and looking back it was a financial trap and nightmare. I never paid off my mortgages because I was constantly moving because of company relocating me.
So don't buy if you don't need to.
As a 30 year old Londoner, being in the UK is so demoralising. Any sort of ownership or ability to survive comfortably feels hopeless unless you earn close to 6 figures or have a wealthy family.
It's why my family are considering moving abroad. The government is on the side of the rich and not supporting the generations that will need to continue on after them. (Brexit, not taxing the highest earning companies and individuals adequately, lack of affordable housing, lack of fair pay and support for public services etc.)
With the terrible weather and worsening economy (and morals) it's harder to justify staying here.
I was set on buying a house a couple of years ago, but as the situation gets worse in the UK it feels like a 25-30 year shackle as opposed to an opportunity.
My heart sank reading your message. I feel you TOTALLY! There are sooo many people in their 20s and 30s that feel exactly how you feel. Moving out of the UK isn't a bad idea but you need to be moving into better circumstances. Alternatively, leaving London (if you really want to own a house) is what to do. It's sad but it's the reality of this country and that city. As you say, only those who have the means can afford to live there. Mary grew up 27 years in Hackney and couldn’t even own a house there. When we go down there now, it is totally gentrified by people who have Generational Wealth passed down. Even where we lived in the Greenwich Borough became unaffordable. We had to leave and move to Kent. It paid off! However, even that's becoming mad expensive and pricing people out. This is partly why I made this video because for a lot of people, renting is their only option and that's OK. However, both owning and renting have pros and cons. If we were starting all over again, we'd consider strongly moving outside the UK and run an online business that earns in dollars to help us to buy a home outright and support our lifestyle. Alternatively, do what we've done but find somewhere even cheaper so that we're not heavily indebted.
@@TheHumblePenny Thank you for the advice. It can be hard to change your mindset when you've been raised to aim for certain goals, but as we've realised the goal post and reality of life keeps changing so we have to adapt.
The same reason our parents/grandparents came here is why we have to leave. Unfortunately other countries pay more with my husband and my careers. But it's hard when you don't know people who live there to get a true gauge of quality of life.
Luckily the internet. Which is how I found you✊. Keep doing what you're doing 🙏 and thanks again.
@@Dani117love We keep going ❤
Love this very real conversation. As a renter who has no family to depend on, and aspiring to own one day it’s easy to be envious or feel like you’re behind everyone who has the help to buy. Just very sobering, owning a home is no easy ride!
I feel you. That envy is real because there is the pull to own a home everywhere. Thank you for watching. Do please share with others.
@@TheHumblePenny I will, love your channel. I’m 25 trying to break a lot of generational curses, your vids have helped a lot me a lot 😊
Whilst i completely agree with you, if I hadnt jumped into home ownership 8 years ago i wouldnt be in my much better house now with less than 40% left on my mortgage. And having a young family, it feels essential to be able to shelter them in your own house. I cannot wait to be mortgage free!
Keep going! You're doing a good things and I understand where you are. It is a good move for sure and I did the same as you. What makes what you're doing worth it is that you're working towards becoming mortgage free. This is a worthy destination :)
Agree with you i feel anyway you can ladder up the property is better, even with help to buy or sharehold, this way you will be paying monthly for your mortgage rather someone else mortgage through rentals.
Thanks for this video. I am a FTB and was surprised with your comment to wait until you have a significant other to help. I personally feel, if you cannot buy on your own, you sure will be in trouble when the relationship falls apart. As a person aged 40, seen it a lot in my friendship groups.
Couldn’t agree more. It’s always easier for those in “stable” relationships to say this but through personal and professional experience I have seen so many of these arrangements go wrong. Even when it involves family members. Besides, romantic relationship sustainability just isn’t as it used to be. Such comments need to be considered alongside the high divorce rates and property claims going through the courts. Joint purchases aren’t even an option for most ppl. And were they are they may not be the wisest!
What I'm saying is, it's easier if there was someone else (including someone you can share costs with that isn't a partner). If you're single and can afford to, please go ahead.
Thanks for this enriching content. Personally with today's prevailing situation, people should actually think it all over again if it's worth doing. They shouldn't just go into it right away just because everyone says it's the way to go.
Absolute 💯
The problem with this idea is that, the rate at which house prices are rising, you risk missing the boat for good. & if you don’t own within the next 5 - 10 years you may never get on the ladder.
Essentially a London situation spreads all over the country over time due to the countries lack of ability to deal with rising inflation. So if a house in 5 years on average is worth 500K the average person will not have 50K deposit let alone the affordability to pay the monthly payments due to selfish corporations not rising employment wages to keep up with house price inflation.
So when you choose rent, just know your risking missing the boat & it will get to a point where the only new people buying houses will be those who have gotten wealthy or come into some large money some how, the divide will be big, life will get worse as you know it because the maths doesn’t lie.
With all the factors mentioned in the video, I think anyone who falls within any of those categories is better off in the interim to miss that proverbial boat! It makes no sense to buy when one would eventually loose it anyway which might also come with its own downfalls such as negative equity etc.
it’s a long term commitment that must be well taught through before committing to having considered all the points that have been highlighted in this video.
As usual, really great and timely content! 👏
Great video; so important to remind people not to buy a house just because it's the 'done thing'. Personally I'm keen to become a homeowner soon because, first and foremost, I can afford it for the first time in my adult life! I'm married, settled in my career and location and I'm ready to have full agency and privacy in my home for the first time in my life.
We lived in a house whose wall and roof cavities were infested with rodents for 3 years because it took the landlords nearly a year to believe us, another year to get a professional pest controller out (they put poison down and we lived with the smell of decomp) and it was only when we moved out they admitted there was a broken sewer pipe allowing rodents to climb up and into the wall and roof cavities.
Even when you have perfect landlords, you're living in an asset they own, which they may need or want to sell at any time. They have right of access to your house for inspections etc. I'll probably feel differently when I'm emptying my bank account to replace my first boiler, but I'm nearly 40 and I'm soooo ready to live in a home where we decide who has keys to our doors, and it's nobody else's business what's hung on our walls and how often the lawn gets mowed 😅
You've said it all
Wow, what a comment. Love it! Gotta say, by the sounds of what you've been through and where you are in your life, it makes sense to buy a house. Keep going and we look forward to an update 😀
I understand what you're saying but it's more complicated than this. Unfortunately, in the UK, you never really have full autonomy over your home.
If you're a renter, you answer to a landlord.
If you're a leasehold owner, you answer to your freeholder.
If you're a freeholder, you answer to the council & your neighbors in the form of planning permissions and neighborhood disputes.
Rent is just as expensive on a monthly basis if not more. The money also disappears into thin air, while the mortgage is essentially going back into your own pocket(minus interest). You will also get your deposit and equity back when you eventually sell but get back nothing when leaving a rented property. I however think renting gives flexibility financially as it enable people to be liquid and make investments that will give faster returns than a mortgage, so depends on the person.
Very good points
Very insightful video thanks for the phenomenal content Ken! As a 27yr old I always believed home ownership was a primary driver of wealth creation in the UK. However, given the current economic climate there must be another way.
100%
You make some great points for the current climate, but for me despite all the responsibility and costs that it involves i am a committed home owner and would never replace home ownership with renting as i feel in control of my own destiny, especially when I made my last mortgage payment six years ago. 🙏🏾🙏🏾
I hear this 100%. You made a good move and it will pay even more dividends as you get older into retirement.
@@TheHumblePenny thank you! Keep up the good work! 👏🏾👏🏾
Really helpful video! I used to feel like I was behind for not being ready to buy a house but more and more I’m seeing I’ve made an active choice that it’s not for me or as attractive a choice as it once was.
Yeah, do what works for you. Stay open-minded and keep assessing your goals and needs.
I definitely regret taking on a big mortgage, although we love where we live and the benefits of proximity to good schools cannot be quanitified. If we didnt buy when we did, we would not be able to now. I think that's a huge concern for people. I think also if the rental market was more favourable to tenants (e.g. longer term lets) then renting would be a more viable option. We were renting but would come home to find a notice to terminate the agreement and suddenly your life is upside down. Flexibility is a two way street.
Also worth considering you can always rent a room out tax free when you buy a home.
Very tricky debate and there never seems to be a good time to buy.
Very tricky debate for sure. You can tell by the number of comments on this video so far as so many people have a view on this topic. Thank you for sharing though. We always like to read about lived experiences. As you rightly point out, the rental market could be more favourable.
My partner's son bought a house with his partner which is about 40% of their income plus they have a son and she works two days a week. The only reason why they survive looking after the house is because my husband trapes 20 miles every five minutes to help them fix things. It's such a risk I think, all to have the big house which is just filled with things that you won't even use.
And that time your husband is spending comes at a hidden cost!
Love the point on ‘uncontrollable service charges’ for flats; its often at least equivalent to or more than the cost of monthly council tax bills - it’s definitely one for people to be aware of when purchasing flats
When I got my property 5 years ago what I looked at was how much my rent was likely to go up each year. (It was housing association contract increase 2% per year). I calculated that into retirement to see what pension I would need to cover it. I am fortunate to live in an affordable area of the country. I am also in rare position that having locked in new fix (10 years) couple of months back my mortgage payments are actually due to go down!
Smart! I like that you also considered retirement and your property needs.
Everything you said about owning a house can be said about rental. If you are renting and there is a problem you can call your landlord but will they fix it? If your renting and decide to travel the world great, but if you had a mortgage you could sell the house to fund your travels or rent it out. The bottom line is this, when you rent you rent forever, but when you take out a mortgage eventually the property is yours and you can then keep that money in your pocket. Yes I know that some homes do get repossessed but for most people they manage to pay their mortgage and then leave the house to their next of kin when they die.
Thanks for watching 😀. Good points. This is just the other side of a conversation that is not often had. Buying a house is a good idea under certain conditions not always.
Question for you - How many people do you know actually own their house outright or passed it down to their children?
I know quite a few people who own their houses outright and a few who had their houses left to them in a will. I'm in my late 50s and my parents generation encouraged us to buy rather than rent, I'm glad that they did.
@@valritajones4044 Good to hear :). We hope more people who can afford to buy do and don't just do so blindly on autopilot because things are very different right now.
Another point to consider is when you rent a house you're actually paying your landlords mortgage.
I am intrigued why someone who bought there own house is putting others off. I bought my house 15 years ago, it is no rocket science, yes a deposit was required . Maintenance is not sky high. I pay for home emergency cover with my house insurance but in the end much cheaper than renting.
If renting is so great, go and sell your house and live the rent-life
Appreciate videos like this. Been really thinking about getting a place but man, these prices are INSANEEEEE!!!
Bro!! I hear you 💯. This is why I felt this video needed to be made.
Great video!
I generally agree with your points, in that you shouldn’t buy a house if:
(1) you can’t afford a reasonable deposit (I would aim for at least 20%);
(2) you aren’t settled in terms of location (ie you want flexibility)
(3) your tendency would be to view the house as an investment (it is a home, which is an asset but not an investment)
There’s no problem with renting but you should note that high interest rates will eventually feed into rental prices, meaning it will often remain more expensive to rent than to buy. Yes if your boiler breaks in a rented property you can call the landlord but remember s/he will fix the boiler from your rent so be prepared to see rent increases.
More importantly though as you move into retirement and your income drops home ownership will protect you from future housing price increases if you manage to pay off your mortgage. Even if you’ve invested wisely you can still be dangerously exposed to increases in rent in your old age.
Kele, spot on point about retirement. To be continued on another video...
@@TheHumblePenny
FWIW I think you’re right in that I wouldn’t advise anyone looking to buy to do so now even if they have a suitable deposit. High interest will mean they pay way too much over the term. Give it 5 years, invest the money and rent for a while to see if rates drop.
I completely agree. I’ve never owned a home and nearing 40. Never had a great income. Hubby and I have always had variable health, so taking a risk with home ownership was something we shied away from. Not to mention that we have not been able to save a deposit for the property we would like. Now, in the current climate, our income is a little better, though health no more certain, we started considering shared ownership, but cannot get anything comparable to our rental property in size and location that’s affordable (taking all the additional costs you mentioned). And even though we are in social housing, as it is a newer property, we don’t have the right to buy. It’s a shame, but I guess we are destined for a rental life. Just grateful for a secure roof over our heads to be honest.
Thank you for sharing. Stay positive :)
Instead of getting a mortgage, I kept buying divi ETFs. In the near future, the dividends will be paying 80% of my rent. Ive never liked the idea of being in tons of debt and having to work constantly to pay it off. The price of some of these yards dont match the value.
Brilliant information once again Ken. With the little that I have saved and have got plans to escalate my saving now that my oldest is 23 and my youngest is 17, I believed that all is possible with God and I can and will still own my own home without a rush but with God's help to satisfy me early and that I will live to enjoy that which He has and will bless me with. Not everyone on earth will achieve their heart's desire but God will not allow you to be in need - where owning your own home is not possible, renting, social housing, etc will be.
Absolutely, love your comment and perspective.
Very rich channel. I have learnt a lot here. Thanks.
The points are well noted but they are not sufficient to compete with the advantages with owning a home versus renting except you have a free place to live.
1. Your home is so important that you don't want any uncertainty or things you can't control around it. E.g. Landlord/landlady increasing the rent as he likes, delay in repairs, very long time in getting accepted as a tenant for a new house etc. You don't want to subject your cherished family to all those things.
2. The rent you pay is totally consumed. The mortgage you pay go straight into building your equity in that property month-by-month. It may be small now but one day you will wake up and find out that you have more than 50% equity in a 400K home.
The balance, own a moderate home that meets your need and not your wants. An extravagant or expensive home is not an investment as such.
Great advice and great honest explanation from someone who is a homeowner.😊 I think some commenters might have missed the actual message though. If you can afford to buy then great! Go for it! No new news there! 😄HOWEVER! Given the current climate Ken is saying weigh up the pros and cons as to whether homeownership is really for you and not just a tick box exercise. Its a serious commitment and like some others have mentioned the UK culture has always swayed towards home-ownership but in todays climate and for many that might not be a viable option for some. Saving up for a larger deposit and/or renting is not a bad thing.
Someone who actually watched the video properly 😊❤️❤️
Although I agree with most of the things you said, I still think it always depends on personal circumstances. I know someone who bought a new built flat in Birmingham City Centre with 60% discount (government scheme). The person made 20% deposit, and is now paying less than half of what she could have paid if she was renting. Plus, the possibility of converting that in to renting in the future looks like a good investment. This including the sercive charge.
Thank you for this video.
Right on ! you never truly own a place until you have repaid it. A home is a lifestyle choice not an investment. If people can afford to buy it outright or paying half of the property but otherwise on a standard income it's a trap as people don't take taxes and unforseen expenses in consideration. It's a liability
Spot on!!
I agree with your points, however it makes me a bit sad because I've been renting ever since I moved to England, I'm now approaching my 30s and me and my long term boyfriend are thinking about having kids in the future (4 years time or so). I've grown tired of renting, of moving almost yearly, of every house I live in not feeling like a home. Renting while having kids sounds awful to me. I know that the house we're currently living in doesn't even allow children.
Currently we have around 40k saved and we're aiming to *attempt* to buy a house with as big as deposit as we can, shooting for 40% deposit. But all the news, cost of living, house prices, all of that is very demoralizing and, honestly, I don't know what to do. All I know is that, yes renting gives you flexibility, but it's also a pain in the butt and you constantly feel like you don't belong anywhere.
Daniela, I feel your pain. Well done for saving 40k! If you're both settling down and plan to have children, owning your own home is a very good idea. Especially given how you feel about renting. But you need a solid game plan for where you want to buy (being realistic) and a plan for how you'll get rid of that mortgage eventually. Buying a house was a very good idea for us given our set-up with kids and the desire for stability, etc. If those are priorities for you, then definitely keep going. You'll cross that line one day :)
If you have 40k, why not deposit 30k as 10% on a 300k home and replace your private landlord with the bank?
It might mean buying in a different location or a smaller home first but if done right, allows you to save or not pay off the landlords mortgage.
With house prices currently doing a nose dive, not the smartest idea
I am not a financial advisor. A stable roof over your head is priceless!.
Why do you need 40% deposit? Buy a home with whatever deposit the lender accepts to grant you a mortgage (£40K for £400K property is doable). You can always make over-payment every month/how frequent as you wish upto 10% of your original borrowing amount per year without penalty. Over-payments will reduce your mortgage terms which means you can be mortgage free earlier.
One day, you will thank me for this idea.
house prices may be going down now or rate of increase slowing down, but if you need a place to live for now and will stay in it for the next 10yrs, then you shouldn't bother about that. You should find something within your budget and make your mortgage cheaper than private rental market. House prices will go up and down but so will rent!
This Content is gold dust!! The home ownership obsession is a British-American thing, in some European countries renting is commonly acceptable, resources can then be invested in a portfolio to create wealth. Mortgage (car finance) is one of the main blocker of wealth creation plunging most middle earners into financial trouble during economic volatility such as the current high inflation / interest rate.
💯 💯 💯
That’s because on the continent the rental market is regulated in many countries and tenants are much better protected. Families can stay put for years in a good rental at a reasonable cost. No such security in the UK where the threat of eviction/sale/rent increase is constant.
'FOMO driven desperation' it really does sound like a trap to some extent especially if you can't afford it yet. thanks for the insightful video as always
Thank you :). Do share with others
Very good points made. I was inspired to acquire a buy to let watching your videos.on the other hand, my principal place of residence provides long term stability, peace of mind and an option to take advantage of rent a room scheme.
Or the other option is stay home living with your parents until your financially ready.
There are situations now where rent has become expensive and takes up a significant % of monthly take home pay.
Your video has certainly been playing into my thinking lately of whether to go for a house or flat 🤣
You know what, this is what Mary did. She lived at home till she was 27 and saved loads. This is definitely an option for those who have family who can allow them to live there, etc.
Hoping rates will continue to rise to at least 10%, then there will be a much needed correction in the market. Then people like me can buy a house at a reasonable price.
I live in Bristol, and it's just been published that it's the most expensive city to live in after London. I have lived in my flat for 17 years, single parent, don't want a partner to live with. Best decision I made to buy my property. If I was renting it would be 3 times more expensive.
Thank you for sharing. What's made Bristol so expensive?
Morning, this makes absolute sense. Would really appreciate it if you could make a video on the pros and cons of downsizing when reaching retirement age given the current economic and housing climate. I live in the South of Greater Manchester
Great suggestion 👌🏾
9:50 Just want to highlight that while rents are skyrocketing, we all know interest rates are too. Just like how your barber saw his rent rise from £1k to £1.8k, there are homeowners who are seeing their mortgages rise similarly and none of that £800 increase will go towards building their wealth, just like the renter.
As you mentioned, unlike your barber, these homeowners do not have the option of simply packing their bags and finding a better deal elsewhere.
Hi Ken
I think most people buy houses out of the Jones pressure. However if you have an opportunity to buy a council house on a Right to Buy basis I'd say jump on it and take advantage of the discount.
Yes 👍🏾
Love this channel! And this is really good for those who haven’t purchased yet. Just got a fixed rate for 3 years and that’s when my HTB ends and I’m not sure if I will sell or continue on. I won’t lie I do get nervous about what the interest rates will be like in 3 years!
Thank you, Chel 😀. We hear you about being nervous. It's very uncertain right now.
Hi Ken, great vid. I prefer to own property than rent but I truly think it comes down timing. My wife and I are paying a mortgage and trying to become rich, though this is something we started in 2015. We have stocks and shares which we plan to build for 10 years. At which stage we'll equally pull stocks to pay off the remaining mortgage and be mortgage free to invest bigger. Whether we'll go into property or ontinue investing fully into dividends at that stage, we're unsure, but I definitely agree it's about timing the market. We're remortgaging August, but luckily only paying £200 more a month due to what's left.
Keep going! You have a plan and that's better than most people have.
@@TheHumblePennyThanks.
Really good points! very challenging.. It's hard not to follow what everyone around you is doing. Does it make sense then to rent and invest the extra money towards paying cash on a future home? for example when we retire, having the option to buy a house with cash and being rent/mortgage free.
Home buying is such an emotional decision but its reallt good to bring these points to bring us back down to earth!
This is such an emotional topic. I think some people literally feel attacked when you tell them there are scenarios when buying a house won't make sense for them. So deep is the programming we all have about buying a house as the ultimate destination.
One thing I've learned is that one way of doing things doesn't suit everyone. Some will always be better off buying a house and some better off renting. It will depend on each person and their circumstances. However, renting and then investing one's money and buying in the future should not be frowned upon. Obviously if one can buy early, they should, however, the alternative path is also a credible one for some people.
We bought because we could afford it and we wanted the absolute security of a home and because we were settling down to have children. For another person under other circumstances, renting could make more sense.
The main point is peoples are not earning enough to buy or rent and the government are corrupt
great video, harsh reality I will say, remind of the book "Die with Zero".
Great points shared and loved the explanations too.
Thank you! 😀
So rent for the rest of your life and when the owner wants their home back I have find another rented home to move into which most likely will be more expensive than the previous rental property . And in the end I own nothing substantial in life, nothing to give my children. On edge because I may have to move any time , uncertainty. Right . Life feels shxt , what is the point of anything .
No one said you should rent for the rest of your life 😀. You can buy if you can afford to. Alternatively, rent for now and assess things as you go.
The bonus one is the nail on the head because why would you tie yourself down like that? I think even buying a flat solo kinda sucks, plus who will inherit it after you pay it all back?
The majority of my wealth has came from home ownership. I always improved properties that were cheap and needed some work.
I made more profit than my salary 2 years in a row and then made another lump sum 2 year later. I'm not onto my fourth home and will soon be downsizing into a home to be mortgage free.
There's too many positives to home ownership not to buy if you can.
Private residence relief, having payments go toward equity rather than rent, homes go up in value over the long term and last but not least, a man's home is his castle. When you own your own home you can do what you like with it and it gives you a better sense of pride and well-being.
I'm not a fan of videos where people don't practice what they preach. If its not a great idea then sell your home and rent. Otherwise it's just hypothetical and seems a bit like click bait.
Are you trying to say that as a homeowner, I cannot explain why in the current climate, it might not make sense to buy a house? And why renting is a credible option whilst one assesses their situation with the potential to still buy one day if it suits their circumstances?
By the way, good for you re creating wealth from homeownership. If you watch the video well, I make it clear that one should buy a house if they can. However, buying a house at all times and at all costs is not the only solution.
I’m not sure about paying of a property early in every circumstance. I would rather remortgage take out the equity and reinvest it in another property. You lose the opportunity to do this why you pay of the mortgage.
Very good advice. I feel in the UK, England especially, we're pushed to own a home.
House is a tangible asset unlike stocks or so, which are purely numbers pushing game. If you like to move around for work, no problem just rent out current property and pay the mortgage from the rental income you generate from the property, and rent wherever you want for the amount you would pay for mortgage payments. You can move around for years and still eventually own a house, where you don't have to pay rent. I feel anyway you can ladder up owning a property is a good thing, and if you're good with finances than you can finish the loan 40% of the term if you can mange to pay double the mortgage payment monthly.
Great video Ken, keep up the good work!
Thanks 👍🏾
The difference is owning gives you a choice, dont like it sell up and move. Not having to wait on a transfer.
Among all the points mentioned, having bad neighbours can be the worst, especially if you have a 20-30 mortgage! If you're renting, just give notice and go!
Ken, why are you shouting?!🤣 But you're right... buying a home is a massive financial burden people shouldnt take lightly but either way one should aim.
Lol 😆
Nice analysis of the situation but at a glance which is easier? Owning a home and building equity or paying into another person’s equity by renting? If you buy clothes, you will definitely need a washing machine and detergent to wash your clothes regularly. In my view, it boils down to affordability.
Hi Ken, but usually in London, the rent is more than £1000. In this situation, isn't it better to buy a house?
The rent is more than £1000... Yes, but without all the other burden. If you can buy in London, great. We couldn't afford to so we left. I suspect that would be most people.
@@TheHumblePennyyep. Most ppl should leave London. Rent way too high
Interesting. However if you’ve found a great deal on a property, go for it. If the math is mathing based on your circumstances, go for it. Don’t overstretch, that’s the main thing.
Yes, exactly.
Standard home here £400,000
Rent for same property £1800. Pm over 25 yr = £480,000 if no increase , so no renting is not money saving in the slightest
Also if plans to travel , put deposit on a house, rent it out while travelling, obvious income .. worked well for me and ver least stability, buying a house as young as poss is the best thing for most if you want your money to work for you and your future
In 25 years rent would not be at £1,800 monthly. It might double the amount.
If you don't have children or value a stable secure home then renting is a perfectly viable and often financially more advantageous option in the short term otherwise home ownership is always better especially over the long term.
I bought a 2 bed flat near Edinburgh for 185k last year, 3.6% interest rate but it was a new build so is only being finished just now. Not sure if I did well or made a mistake but just gotta roll with it now.
Congrats!! Enjoy your new home. You've done what many people want to do.
Great video 👌🏽 I sold my flat in February due to some of the points mentioned and just want the flexibility to travel & invest while the economy is in the 🗑️ I'm not sure if I'll ever buy again for my home.
I brought a house years ago; as I did not want to work and make someone else rich. Did not want to pay money to live in a shanty let either.
I paid £39k for my home in 1995 and paid it off within 5 years. I then continued investing the same money I would have to pay on a mortgage into a ISA. it's Currently over 300K. Had I decided to increase my house this 300K would be in the banks pocket.
This is actually an incredible vid
Thanks for watching
Completely agree, always have the option to rent and invest, this way that big deposit is working in the market and not just sat in a home which may or may not increase in value. If you can’t comfortably afford it you should probably carry on saving until you can.
Yes!
If you own a house and decide to move or don’t like your area. Just rent it out, these days housing agencies do everything for you. All you need to to is pay a small fee. Owning is the way forward. Renters just pay other people’s mortgages.
Until you finished paying that house and then you can boast about it. Thank you for your great knowledge , couldn’t thank enough. ❤
Take in a Lodger and they help pay the bills, problem solved. The demand for accommodation these days is huge even in the suburbs of most main Cities. Professionals and Students are always looking for accommodation. Living with a girlfriend/partner is not always a wise decision. Swings and roundabouts - Buying a house worked out OK for me. So good that I bought 2 more as investment properties. Right now buying a house in the current housing market is maybe not the smartest idea or thing to do but it won't always be like this. Yes, you need insurances and to fix the washing machine, cut your grass but you can also install artificial grass which means you have little garden maintenance to do. I don't unfortunately yet have a location independent occupation or business but watch this space. 😊
Very sensible advice. Thanks for sharing
I own a flat and the service charges are a problem. However, my flat is mortgage free and is worth quite a bit so for now the service charges are not a problem.
Thanks for this Ken. We are planning on buying as we have a decent deposit but we are unsure if time is right with recent interest rate rises. Last night i thought maybe we shud move abroad cos that money cannget olus a house outright in the right country. Will see what happens..will hold off n put the money in an investment until next year
I recently told Mary that if we didn't have school to worry about here in the UK, we'd be abroad.
@@TheHumblePenny same her. Kid in school and special meeds too so any move abroad has 2b carefully planned
Absolutely brilliant video, I love it. You hit all the points especially 25% of your income should be the max prejection for your mortgage. However due to the fact I am in the real estate industry I need to sell all my listed apartments. My love for you right now is 50/50. But overall. You are a legend.
👊🏾
I am one of those people who is paying off a mortgage in retirement. It was a deliberate decision in times of cheap money. I will now pay it off quickly as today’s mortgage costs make a better investment than putting money in a bank savings account. I am not crying as my investment returns including pensions were the best decision.
Rental flexibility is great but the market is so broken. I just wish they'd abolish stamp duty on your main residence at least as it's a tax on mobility and stops homeowners from moving to pursue opportunities - just as you've highlighted. Still trying to suss out my plan for the house I own outright.
I think you are spot on. Here is my take on it. For poor people trying to raise to middle class owning a home is the goal. I think people often see it as if you own. You're 'better' than others. Owning a home hasn't been my main agenda in life. I simply cannot afford to atm. So I have rented all my life. I am at a point where I want a home I can call my own, but I don't have enough for a deposit for London. I have always been interested in owning a home as a source of income. That's something I want for myself. An asset I can make consistent money from and property seems like a great way to do that. I do think there is pressure to buy a home. But no one talks about the peiwpl who bought a home but can't keep up the mortgages, peope who buy a home but there always something wrong they have to fix and fork out money for. Owning a home just like rent goes up interest rates on a mortgage can shoot up too. I sometimes wonder if owning a home is a low-key scam to keep people paying your hard earned money to banks for 50yrs.
Paying a landlord and resigning yourself to rent is renting for life. You can never take equity out of a property to invest in something later in life if you rent
If you don’t currently own a home, you should always be planning/saving to do so.
Rents are insane, I find it difficult to see how buying a home is more expensive.
Don’t forget rents are way too expensive, and those monies you pay towards rent are money gone in the bin. You could have invested that into your own home that you recover when or if you sell. Remember you will always pay bills irrespective of renter or home owner.
Issue is saving towards deposit, if you can go for a home you can afford the mortgage it is way better than renting.
Stamp duty is wavered on purchases under 400k and there are 95% LTV if saving for that deposit is an issue. Yes mortgade rates are quite high but rents are also too high now. Don’t enrich landlords! If you can afford your own home.
I do love some of your videos and completely disagree with you here.
I think buying a house will work for some people at certain times. However, what I'm saying is that it is not the only option. Renting is a good option for some people. As with all things, both of them have pros and cons. If you can buy a house, sure, go ahead. BUT, you also have to be prepared to be a homeowner and balance the rewards with the risks. That's what I'm saying.
Definitely worth owning and paying off house asap or before retiring but as you say not if you’re young and single. I always follow that 25% rule for monthly payments as well. I’ve got a small mortgage left on a 2 yr tracker where I can overpay 25% without penalty instead of 10% on a fixed rate with my current lender. At the end of the 2 yr term as soon as it hits the SVR ill make my final payment to be mortgage free.
Which mortgage lender is this?
Excellent video. Sometimes spelling out the basics is needed, really to look at the ridiculousness of the housing market
Thank you Ken for a great video.
You're welcome :)
Fantastic video Ken love the channel. Just as Robert Kiyosaki said your home is not an asset it’s a liability.
Government has failed to have a house building policy , decades of neglect , I would also comment the mortgage sector is not stable and very shortsighted which is idiotic when majority house sakes are long term commitments .
I have always thought their should be different interest rates for different sectors .
People power in setting up good old fashioned building societies is another way forward , commercial banks have failed ( 2008 tax payer bailed them out )
Nothing but truth spoken
Thank you :)
This does make a lot of sense about different options to owning a property.
One question i would like to ask?
What about people who have a low credit score or had bad credit in the past.
Can they still get on the property ladder and if so what options would be available to them?
Thanks for that enlightenment!! We only think about the good side of thinks until the dark side caught us off guard!!
Exactly. And it's important to tell both sides of the story. Owning a house is great but has disadvantages. So does renting.
Overall, if one can buy and afford a home without strain, and look to pay if off sooner rather than in 25 or 35 years, it will work in their favour. However, renting is a good alternative for people who either can't afford to buy or simply choose not to in this climate and then reassess things as time passes.
It's rather an advantage if u struggle to pay for ur mortgage since it will save you rent money (as in rent is rather on mortgage ) and in trying times ,you can get your equity and re-mortgage ( i.e get the money paid so far as mortgage and still have a house to you name .
i might never buy! might never have the chance to, but still. the costs can be horrendous. i'd rather let landlords take the risk, and make my own investments in other assets. plus i've had too many experiences with nightmare neighbours. the thought that i could be stuck next to that person until further notice... not good!
Very nice video 📹 👍 keep it up ❤
I would rather pay £1000 mortgage than £1000 rent. Plus the future value of money is less in the future so that massive mortgage becomes not so massive in 10 years time and inflation actually works in your favour as long as interest rates aren’t too high🎉
If you can properly afford to buy, go ahead. That's really it. If you can't, don't buy, it's OK to rent.
Awesome topic. I will be waiting to buy a house.
Good points 👍👍👍
Upgrade your home insurance mate! Mine covers all those unforeseen circumstances. Washing machine, boiler, push bikes in the garage, kids breaking the television after throwing their toy into it. Full proof mate.
Housing affordability is at its worst levels in 150 years. Buying a house with a large LTV sounds like a pretty stupid idea to me atm
The average deposit is 25%. High LTV is fine if you don't plan to move.
@@border304 and you don’t lose your job in an economic downturn
@@missjane782 Well presumably that's always a concern at any time. How do you pay rent in that situation?
Invaluable insight here 👍🏾
All great points
I disagree with the vast majority you wither buy your house and it is a long term investment. Or you rent and pay someone else's long term investment. Why did you buy you house?
Lol, I think it should be “why you should not buy an expensive house” just buy cheap then rent it out or sell. I think the main problem is that houses have become so many peoples main financial investment.